FY26 - levy period 3 estimate

Source: table 1.1 - taken from FY26 initial levy estimate

A summary of levies to assist entities in calculating the leviable amount can be viewed on the ASIC website. 

ASIC will use the industry funding business activity metrics for the qualifying period to calculate the leviable amount for the CSLR levy period. The method for calculating an individual entity’s levy is set out in the Financial Services Compensation Scheme of Last Resort Levy Regulations 2023. 

The information collected from the industry funding annual return will be used for the calculations of levies. ASIC is responsible for calculating each leviable entity’s share of the total levy in accordance with the prescribed regulations.

ASIC will issue levy notices and collect levy payments on behalf of the Government.

In accordance with relevant legislation, CSLR has determined the estimates, having due regard to actuarial principles and in cooperation with suitably qualified and industry recognised experts. CSLR recognises, as with any estimate process, there is a degree of uncertainty particularly when regard is had to the number of variables and the potential for them to change over time.

CSLR has not deviated from the estimates determined in the report prepared by Finity Consulting (the Principal Actuary). 

CSLR reasonably believes, noting the prudent and realistic assumptions made by the Principal Actuary, that the estimates accurately reflect the expected total cost of the compensation payments to be issued and the associated costs of operating the scheme during FY26.

CSLR Actuarial Policy

CSLR has adopted and implemented a Policy for Determination of Estimates for the FY26 levy period. This policy ensures the appropriate framework and governance structure has been incorporated into the determination process which reflects its obligations under the legislation.

Independent estimate modelling and report 

CSLR engaged the services of the Principal Actuary to undertake the detailed modelling and analysis, ensuring compliance with legislative requirements and confidence in the estimates.

The Principal Actuary’s recommendations were:

• FY26 initial levy estimate of $77,975,000 million

A full copy of the report is available to provide transparency of the estimates modelling and assumptions.

Finity is Australia’s largest actuarial consulting firm. Their actuarial services are provided by over 150 professionals with deep domain knowledge across the financial services industry, and the private and public sectors. They bring experience working with other compensation arrangements, and across other Commonwealth and State Government schemes.

Taylor Fry has worked alongside government and industry across Australia and New Zealand for more than 20 years, providing quality assurance and tailored actuarial and analytics advice. Drawing on a wealth of market understanding and expertise, the independent consultancy has developed many long-standing relationships, including with compensation schemes – and most recently with the ARPC – by supporting leaders to make sound, evidence-based decisions.

CSLR has been working closely with ASIC and the Government to establish the scheme. Each entity has a different legislated role:

• CSLR is authorised by the Minister to determine the total estimate for the levy period to meet eligible claims and costs.
• AFCA investigates complaints and determines if financial misconduct has occurred and the amount of compensation that should be made if substantiated.
• ASIC applies the formula set out in the regulations to determine the levy share for each entity, issue levy notices and collect levy payments on behalf of the Australian Government.

FY26 initial levy estimate

The legislation requires certain steps to take place before ASIC can issue the levy notice.

• CSLR, with the assistance of Treasury and the Office of Parliamentary Counsel, will register the levy instrument and explanatory memorandum on the Federal Register of Legislation .
• Instrument tabled in each House of Parliament.
• A ‘Disallowance period’ of 15 days for each House of Parliament needs to be satisfied.
• ASIC calculates levy share for each entity based on the legislative requirements.
• ASIC issues individual levy notices to each entity.
• ASIC collects the payment on behalf of the Australian Government.
• Government then provides the funds to CSLR.

FY26 revised levy estimate

• CSLR completes a revised levy estimate of claims, fees and costs. The revised estimate can only be issued after 1 July 2025.
• CSLR notifies the Minister that the revised levy estimate exceeds the $20 million sub-sector cap;
• CSLR, with the assistance of Treasury and the Office of Parliamentary Counsel, will register a revised levy instrument.
• The Minister has discretion to apply the special levy, including who the levy applies to, the amount of the levy, the timing of the levy and how the levy is calculated for each identified entity. If the Minister determines a special levy needs to be imposed, a Ministerial instrument will be registered and is subject to a ‘Disallowance period’ of 15 days for each House of Parliament.
• ASIC calculates levy share for each entity based on the legislative requirements.
• ASIC issues individual levy notices to each entity.
• ASIC collects the payment on behalf of the Australian Government.
• Government then provides the funds to CSLR.